How to Buy Land to Build a House

What to know before buying land

What type of land do you want?

• Raw land: This land hasn’t been developed at all. It doesn’t come with access to utilities (like water or electricity), and it might not even have road access. While raw land can be less expensive, it also comes with more legwork. For example, you’ll need to figure out how to get access to utilities (like installing utility poles or water pipes). You might also need to have the land zoned, which means working with local land authorities.

• Unimproved land: This is partially developed land. It might have access to roads and some basic utilities. But it’ll still need some major work before the infrastructure is ready for you to start building. While unimproved land is generally more expensive to buy than raw land, it might cost less in the long run as it won’t require as much development.

• Improved land: An improved parcel of land has already been developed and is ready for construction. It’ll already have access to utilities and roads. It’ll also likely be zoned, so you’ll have to confirm whether residential structures are permitted there. You’ll generally pay more upfront for an improved piece of land compared to raw or unimproved parcels.

What type of home are you building?

• Site-built: Also known as a traditional or “stick-built” home, this is the kind of home you’ll likely picture when you think about building a house. Like the name suggests, it’s built by contractors directly on the site you’ve bought, and it’ll have to meet local and state building codes. This type of construction allows for a lot of customization. However, it also takes the longest to complete — typically six months to two years (or more, depending on variables like weather or delays).

• Modular: A modular home is built in sections (or modules) to meet local and state building codes, with nearly 90% of the construction taking place inside an off-site, climate-controlled facility, according to the National Association of Home Builders. These pieces are transported to your land and assembled there on a permanent foundation. The main difference between a modular and site-built home is the mode of construction — other than that, they look pretty similar when they’re done. A modular home can be constructed a lot faster, though — often in as little as two to six months.
• Manufactured: Like modular homes, these are built in a factory. You can choose between a single-wide, double-wide or triple-wide option — this refers to how many sections are included and determines how big the unit is. On average, it can take just two to four months to build a manufactured home. You also no longer have to worry about having a permanent chassis — a requirement that was eliminated by the 21st Century ROAD to Housing Act as of July 2026.

1. Decide what you’re looking for

2. Research financing options

3. Find an experienced real estate agent

• Zoning: Local zoning ordinances designate which partitions of a city, town or borough can be used for what purpose. If you want to build a home, you’ll have to make sure you’re building in an area that’s zoned for residential purposes. While unimproved and improved land is usually zoned, raw land often isn’t. You can also apply to have land rezoned if needed, though the process can be difficult (and expensive).

• Land-use restrictions: These restrictions determine how land can be used, developed and modified — such as what sort of buildings can be constructed, where those buildings can be placed and what types of activities are permitted. This information is often included in zoning ordinances but can also be found in environmental regulations, property deeds and covenants. All of these fall into a hierarchy where zoning laws have the highest authority. 

• Environmental concerns: Hidden environmental issues can affect your property value, leave you open to legal liabilities or even threaten your health. Some common problems include soil contamination, air quality issues, water pollution, flood risks (a rising issue with the impact of climate change) and hazardous waste or materials.

• Utilities and road access: Not all land comes with access to utilities — or even access to roads. You’ll need to consider the cost of installing these necessities if you’re looking at raw land or unimproved land that has only basic utilities. 

• Easements: If your property has an easement, it means someone else has the right to access your property for a specific purpose. For example, maybe your neighbors have access to pass through your land to get to theirs, such as if theirs doesn’t connect to a public road. You can find out if your land has an easement by checking your title insurance policy, the deed of the property or recorded maps through your county recorder’s office.

• Homeowners associations (HOAs): Land might be in an area that’s managed by an HOA. An HOA might have restrictions that will govern your home’s allowable height, design and setbacks (the amount of space that must be between your home and your property line). If you choose to build in this kind of area, you’ll have to make sure to follow these guidelines.  

5. Have the land assessed

How much it costs to buy land

How to finance land purchases

• A land loan: Also called a plot loan, this can be used to buy raw, unimproved or improved land. This type of loan can also be helpful if you’re not planning to build on the land right away. You’ll then need to take out a construction loan once you’re ready to build. In some cases, you might have the option to convert your land loan into a construction loan.

• A construction loan: This is a short-term option that pays for building a new house. Depending on the lender, you might be able to roll the cost of the land into your construction loan. This way, you don’t have to worry about managing multiple loans.

• A personal loan: Personal loans can also be used to purchase land. They’re typically unsecured and easier to qualify for compared to land or construction loans. However, loan amounts go up to only $100,000, depending on the lender. You’ll also generally need strong credit and income to get approved for the highest amounts.

• A land contract: This is a type of seller financing that serves as an alternative choice if you can’t get (or don’t want to get) traditional financing. Rather than working with a lender, you’ll make a legal agreement with the seller, and you’ll typically get full ownership of the property once it’s paid off.

Buying land for a manufactured home

• Is sloped or flat

• Has access to utilities

• Is connected to roads

• FHA loans: Insured by the Federal Housing Administration, FHA loans have less stringent requirements than conventional mortgages.
• USDA loans: These loans are designed for low- and moderate-income borrowers in eligible rural areas and are backed by the USDA.
• VA loans: These are insured by the Department of Veterans Affairs, and they’re available to service members, veterans and eligible surviving spouses.

Red flags and common mistakes

• Not understanding the difference between types of land: Raw, unimproved and improved land all have their own levels of development — from none (raw) to fully developed (improved). It’s important to understand exactly what kind of land you’re buying and what development it might need, as well as how much that development will cost.

• Not looking into zoning or land-use restrictions: Not all land is zoned for residential use. Even if it is, there could still be restrictions when it comes to land use. For example, some residential lots allow for site-built homes but not manufactured ones. Raw land might not be zoned at all, which means you’ll have to work with the local land authorities to get the proper permissions in place.

• Assuming utilities and roads are included: Raw land in particular might need to have utilities installed. If your property is landlocked — meaning it has no road access — you might have to cross your neighbors’ land to get to it. Or you can look into legal means of building a functional road, which comes with its own hoops to jump through. 

• Skipping surveys and inspections: Land surveys and inspections will help you know exactly what you’re getting with a property, including boundary lines, soil quality and more. Buying land without doing your due diligence means you could end up with major problems down the line.

• Not reviewing easements or legal disputes: Land can come with easements, liens or even ownership conflicts. Make sure you know what you’re walking into before buying anything.